Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

Interview with Al Jazeera

Paris

15 October 2011

SUBJECTS: G20 Finance Ministers meeting; global economic outlook

JOURNALIST:

How would you typify the main challenge for you and your colleagues this weekend?

TREASURER:

Well firstly we have to prepare the ground for the leaders meeting at the beginning of November in Cannes, I think most importantly, to accurately talk about the challenges we've got in the global economy at the moment because there is a serious challenge to global economic growth at the moment from events in Europe, and to a lesser extent from events in the United States. So I think it's important for our European colleagues to state very clearly that they intend to implement all of their commitments by October 23 so everybody in the global economy can have confidence that issues of sovereign debt in Europe are being dealt with comprehensively. Because this is impacting on global economic confidence, it's impacting upon stock markets around the world, and therefore hitting global growth. Everybody in the world has got an interest in ensuring that the Europeans deal constructively with their challenges and do it as quickly as possible. So I think the G20 has got an important part to play in communicating that directly to European finance ministers and sending a message to the world that we recognise that there are other things that the rest of the world can do to assist the Europeans.

JOURNALIST:

I'll ask you about those particular things perhaps in a moment but I'd like to ask you this: your Canadian counterpart last night was saying, 'the Europeans aren't reacting quickly enough on this, you're hanging around, you're exacerbating a difficult situation.' He's highly critical. Do you have some sympathy with that point of view? Would you go as far as his comments?

TREASURER:

Yes I do. The time for blame shifting is over. The time for half measures is over. What we need to see from Europe is a comprehensive approach and I believe we have seen constructively some further approaches in recent weeks. These need to be brought together in a comprehensive plan by European leaders by October 23 so we can restore some confidence in European institutions because we're all in this together. It's not just Europe that is impacted. When confidence is hit, it becomes global. It becomes global when it hits stock markets right around the world. Even in my country, it's had a dramatic impact on our stock market. Everybody is affected. That's why the G20 - through our meetings this weekend leading up to the leaders meeting at the beginning of November - can also play an important role in saying to the Europeans there are things we can do collectively together to further support you to deal with these questions domestically.

JOURNALIST:

What in your mind are the types of directions that perhaps the finance ministers should be making suggestions to their governments? What kind of panacea do you think might work when you talk about that we're all in this together and we need to find a way out?

TREASURER:

Well firstly when you look at countries around the globe, we all need to deal with our fiscal situation and some countries need to put in place fiscal consolidation. Other countries with surpluses will need to reinforce their domestic consumption. We need to see a move towards market-based exchange rates as well. There are a range of reforms that need to be implemented across developed and developing economies but importantly and firstly in Europe we need to see a comprehensive approach to the problems of sovereign debt and its subsequent impact in the banking sector. So we need to see that from the Europeans but we need to see a renewed G20 commitment to deal with those structural challenges in the global economy and get back to implementing the solutions.

JOURNALIST:

You have managed a successful economy and you have received personal accolades for that as well. But how close do you feel this ebbing towards you - ebbing is not the right word - but advancing towards you when we talk about the euro zone crisis? The contagion is not just in Europe but elsewhere in the world.

TREASURER:

When you have a crisis, such as we've seen in Europe, it impacts upon global growth. Australia is not immune from that, nor is the Asia Pacific and of course when growth slows that has an impact on domestic growth in Australia. It has an impact on our budget. It certainly hits our budget revenues. But having said all of that, Australia is probably in the best position of just about any advanced economy to deal with these circumstances. We have low unemployment, we have a strong investment pipeline, we have strong public finances and we have a strong banking system. All of those things keep Australia in good stead. But I represent a Labor government. Our first priority is jobs - jobs not just in Australia, but in the global economy. And what we need to see if we want to come back to global economic health is the creation of jobs, not just to reduce poverty but also to make growth sustainable right around the world.

JOURNALIST:

I was going to come to my last question then but in view of that I'm tempted to ask one supplementary one. I mean there is monetarist ethos in Europe that prevails. Are you suggesting that perhaps the Europeans if they want to achieve growth they have to think about alternatives? In the UK for instance, the obsession is with cutting the deficit, do you think perhaps thinking more about growth in terms of creating jobs, pumping more money in?

TREASURER:

No, I'm not. The first foundation of strong job growth is also a good fiscal policy. But for a sustainable fiscal policy, it can't be achieved overnight. What we need to see is a sustainable fiscal policy over time which also supports employment in the short term. In the long-term, good fiscal policy [supports] fundamental investment in people, investment in education, investment in training, investment in infrastructure. That's what people are crying out - around the globe – for, particularly in many of those countries were unemployment is so high. So jobs, if you like, are the most basic feature of a successful economy. It brings security, it brings living standards, but it also brings sustainability in terms of economic growth.

JOURNALIST:

And just lastly, you have spoken about the success of Australia and there are other economies around the world that are doing a lot better than where we are at the moment in Europe. And they've been increasing suggestions that perhaps they may or might have a role in trying to achieve some stability in Europe, in the economies and the markets in Europe. The Chinese have been mentioned in that context and perhaps some other places. Do you think that's a realistic way to go?

TREASURER:

The G20 was formed to bring together the biggest developed economies and the biggest developing economies. And three years ago we sat down together and put in place a range of measures to avoid an economic catastrophe. We did that successfully three years ago, we can come together and do it again. And whether we're talking about China or whether we're talking about Europe or the United States or Canada or Australia, we're all in it together and we can work together successfully through the G20 to get our way through these challenges.